Even after a face-saving deal cobbled together, markets are cautious as it cannot see how such a disparate group of producers maintains these sorts of cuts beyond a few months.
West Texas Intermediate futures turned negative for the first time ever on Monday, touching a low of minus $40.32 a barrel before closing at minus $37.63 a barrel.
The fall in crude prices is not a standalone event; it is a manifestation of multiple factors, which include global demand and structural geopolitical challenges.
Physical demand for crude has dried up, creating a global supply glut as billions of people stay home to contain the spread of COVID-19.
In the futures market, crude oil for April delivery touched an intraday high of Rs 1,590 and an intraday low of Rs 1,381 per barrel on MCX.
Mark To of Wing Fung Financial Group says that the overall demand-supply story is now changing. He said that there can be some profit booking at these levels but crude is likely to rise up to USD 60 per barrel by Christmas.
LONDON (Reuters) - Brent crude oil prices rose above USD55 a barrel on Monday, trading at a fresh 16-month high, on rising prospects of a tightening market after OPEC members agreed on a landmark deal to cut production last week.
The broader markets marginally outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.7-0.8 percent. About two shares advanced for every share falling on the Bombay Stock Exchange.
A week after WTI crude oil fell to its lowest level in more than a decade, some oil industry stakeholders appear to be hard at work trying to find reasons why the worst is over for crude.
â€œNo balance is seen yet in supply-demand dynamics. Also, temperate winter in North America and Europe due to El Nino is hitting demand further worsening the balanceâ€, says Chris Main, Commodities Strategy Analyst, Citi
OPEC has shown resolve to stick to the decision adopted at last year's policy meeting to pump oil vigorously to protect its market share against other producers like Russia and especially US shale drillers.
Prices tumbled yesterday after a report by the American Petroleum Institute showed US commercial crude inventories had jumped by more than six million barrels.
The slowdown in China that's hit other commodities has sent oil sliding, but the crude market also has been oversupplied and there are no signs of a letup.
Tensions in Greece and a potential correction in the stock market in China aside, the sell-off in oil market last week was sparked by the US reporting the first increase in the number of rigs and the first increase in US crude oil inventories, says Victor Thianpiriya of ANZ Research.
India as a net importer of oil will be more benefited as it will pay less money for buying crude oil from oil exploring countries like Middle East. As far as oil marketing companies are concerned, they may make more profits on diesel (which was Rs 1.9 per litre last month).
Increased expectations of a Fed move to reduce the pace of bond purchases that has helped support the economy sent the US 10-year Treasury yield to a high of 2.725 percent, the highest in almost two years.
According to Mecklai the crude stockpiles have been on a decline in the US which indicates that fresh demand may come and further drive the WTI prices higher. The crude oil inventories reported by the Energy Information administration is to be released later today which would probably show a decline in the stockpiles.
US crude stockpile is expected to rise by 2.3 million barrels in a report due for release later today for the week ended 8th March, which in turn would pressurize prices. However, upbeat US economic reports would continue to provide support to oil prices.
The gap between the two most widely traded oil contracts blew out to its widest level in a year further evidencing that the US and European oil markets are diverging.
Lingering concern over the sustainability of high Spanish borrowing costs may limit further gains in the oil market despite heightened tensions in the Middle East, according to CNBC's weekly survey of oil market sentiment.
Brent oil dropped to below USD 106 per barrel on Wednesday, on track for its biggest monthly decline in two years as a worsening euro zone debt crisis slashed risk appetite.
India Forex has come out with its technical outlook on Gold and Crude.
India Forex has come out with its technical outlook on currencies
Late buying powered the Nifty past the 5,400 barrier and Sensex added 120 points. Thanks to Greece, global markets too are on a rally now.
Jim Nicholson, vice president-Asia at Argus Media tells CNBC-TV18 that he is concerned about the issues in Iran impacting crude prices. “The problem in Straits of Hormuz is a matter of worry for the crude market even as global supply concerns in Iran are prevalent,” he says.